COVID-19’s Impact on the Semiconductor Market


In mid-March, the U.S. stock market was still trying to understand what was happening with the global coronavirus pandemic, having lost nearly 20% of its value in one week. Cooling-off periods (also called “Circuit Breakers”) automatically stopped overheated trading at different intervals.

Market indexes fell sharply, as shown in a chart from Google Finance, which shows the relative performance over the first part of the year for both the Dow Jones Industrials and NASDAQ (Fig. 1). It’s been a roller-coaster ride since that date, with the market rising sharply last week and once again tumbling to start off this week.

Since The Memory Guy is an engineer by training, I can’t easily explain what’s happening to the global economy, but my background as a semiconductor industry analyst gives me clarity about what’s most likely to happen in the chip market. My aim, in this post, is to provide an extremely abbreviated version of the story that I’m now telling in detail to my clients. It’s today’s version of the story that I always tell when forecasting semiconductors since the market regularly repeats the same cycles.

The line of thought, which I will explain below, is the same one that has led to the fact that the Objective Analysis semiconductor forecast has been the most consistently accurate forecast in the industry for the past 13 years. It’s a fact that we highlight by sharing videos of each year’s forecast on a page on our website.

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